The South African currency advanced a third day on Wednesday (20 May), to its strongest level in five weeks, breaching two key resistance levels that stood between it and further gains.

The dollar-rand cross busted below its 50-day moving average of R18.15 for the first time this year. It also breached the 23.6% Fibonacci retracement from April’s record-weak level at R18.044, which could set up a move to the 38.2% retracement line at R17.235.

South Africa’s rand has dipped below its 50-day average versus the dollar

With no local news to drive the market, traders are looking to Thursday’s South African Reserve Bank interest rate decision. Expectations are for the monetary policy committee to cut the benchmark interest rate for the fourth time this year as it seeks to support an economy that could contract as much as 16.1%.

“I suppose one would say no news is good news” for the rand, said Cristian Maggio, the head of emerging-market research at TD Securities in London. “There hasn’t been any major announcement or event in a while and the market may have come to a conclusion that the rand is undervalued relative to other EM currencies.”

The rand, Wednesday’s best emerging-market performer, advanced as much as 2% to R17.97 per dollar by 1:22 p.m. in Johannesburg. That pared the currency’s decline this year to 22%, still the second-worst performance after Brazil’s real.